I must admit to being somewhat baffled by that margin too. I don't have an especially tiny monitor (1280x800), but I don't have my browser window anywhere close to maximised, so the huge gap on the right of the admin pages in WordPress squashes what's actually quite a densely packed set of functionality into a rather small space.

+1 on changing the right margin. I'm attaching a patch that changes it on all the admin screens. I tested the patch in Firefox 2.0 and IE 6 (yes, I still have IE6 around for testing purposes), with a variety of browser window widths.

(By the way, the admin menu looks downright terrible in IE6, and the dashboard doesn't show any panels; I realize that is a separate issue, is someone planning to fix it? I personally don't care much, but it does make WP look bad.)

The right margin affects all other pages as well, Not just the write pages, While it'd be good for TinyMCE to wrap its toolbars, The fact theres a fair bit of rel-estate going unused still needs to be fixed for the rest of us.

On my larger(21") monitor, It leaves a ~200px wide blank area, Which looks drastically out of place compared with the much smaller left margin.

+1. I'm in complete agreement with the comments mentioned above. I'm submitting a new patch that includes the min-width specified for the benefit of TinyMCE. With these changes, the admin fits into a 770px wide window.